Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

Financial Accounting

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

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Multiple Choice

The materials price variance is the difference between the actual price of materials and which of the following?

The standard price of materials multiplied by the standard quantity used

The standard price of materials multiplied by the actual quantity used

The actual price of materials multiplied by the standard quantity used

The standard price of materials multiplied by the actual quantity purchased

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Verified step by step guidance

Understand the concept of materials price variance: It measures the difference between the actual cost of materials and the expected (standard) cost of materials based on the actual quantity purchased.

Identify the formula for materials price variance: Materials Price Variance = (Standard Price - Actual Price) × Actual Quantity Purchased.

Clarify the components of the formula: The 'Standard Price' is the predetermined cost per unit of material, and the 'Actual Price' is the cost per unit actually paid. The 'Actual Quantity Purchased' refers to the total quantity of materials bought during the period.

Analyze the options provided in the problem: The correct answer is the standard price of materials multiplied by the actual quantity purchased, as this aligns with the formula for calculating materials price variance.

Apply the formula conceptually: To calculate the variance, subtract the actual price from the standard price, then multiply the result by the actual quantity purchased to determine the variance amount.